Rite Aid rumored to file for bankruptcy protection soon
- The Wall Street Journal and Bloomberg reported that Rite Aid was preparing to file for Chapter 11 bankruptcy protection in the coming weeks.
- The Philadelphia-based drug store chain currently is about $3.3 billion in debt, according to CNN.
- Filing for bankruptcy would restructure Rite Aid’s debt, including any legal liabilities.
On August 25, The Wall Street Journal and Bloomberg reported that Rite Aid was preparing to file for Chapter 11 bankruptcy protection in the coming weeks. Similar to other drug store chains, Rite Aid is facing mass federal and state lawsuits over its alleged role in the sale of opioids, according to the new sources. Other pharmacies, drug makers and distributors have reached nationwide settlements of similar claims totaling more than $50 billion, according to Reuters.
The Philadelphia-based drug store chain currently is about $3.3 billion in debt, according to CNN. Filing for bankruptcy would restructure Rite Aid’s debt, including any legal liabilities.
The U.S. Department of Justice in March sued Rite Aid, accusing the pharmacy chain of missing "red flags'' as it illegally filled hundreds of thousands of prescriptions for controlled substances, including opioids.
Rite Aid anticipates a net loss in the 2024 fiscal year ranging between $650 million and $680 million. In its 2024 first fiscal quarter results, the retailer reported a net loss of $306.7 million for the 13 weeks ended June 3. Revenues for the quarter were $5.65 billion compared to revenues of $6.01 billion in the prior year’s quarter.
Same store sales for the first quarter increased 8.4% over the prior year period, consisting of a 13.3% increase in pharmacy sales, partially offset by a 4.4% decrease in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, decreased 3.8%.
Total store count at the end of the first quarter was 2,284, and Rite Aid operates in 17 U.S. states.